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Stay the Course

Stay the Course

Investment Strategy Group

Goldman Sachs Private Wealth Management

January 2011

Since the depths of the financial crisis, we have stood against the crowd with our optimistic view of the investment opportunities in the United States, and we remain constructive today. We believe that America’s structural resilience, fortitude and ingenuity will carry the economy and financial markets in 2011 – and beyond.

Here, we carefully examine our optimism about the US economy, US investments and the role of US assets as a core holding in any well-structured portfolio. We will begin with some of the key themes supporting our view: why the US will not face a so-called “lost decade” similar to what Japan suffered in the 1990s; why faster economic growth does not translate into higher equity returns; and why the long-term structural advantages of the US relative to other economies – developed and emerging – lead us to conclude that US assets should remain as the core holding of our clients’ portfolios.

Following this thematic discussion, we present our 2011 outlook for US and global economies, our investment outlook for the capital markets globally, and the multiple risks to our outlook. As usual, we put forth our views with a strong dose of humility, knowing full well that there is no proverbial crystal ball.

Goldman Sachs Private Wealth Management regularly publishes insight and commentary on investment and wealth management topics for our clients. To pursue a conversation on this topic, please contact a private wealth advisor

The Investment Strategy Group is a part of the Investment Management Division of Goldman Sachs and is not a part of the Goldman Sachs Global Investment Research (GIR) Department. The views and opinions expressed by the Investment Strategy Group may differ from the views and opinions expressed by GIR or other departments or divisions of Goldman Sachs.